NEW DELHI: Engineering exporters have cautioned against imposition of safeguard duty on steel, arguing that it will increase prices in the domestic market and make exports uncompetitive.
Steel makers are lobbying hard for protection from imports, arguing that cheap imports from Asean nations, which have a free trade agreement, are hurting the domestic players. Arguing against the proposal, EEPC India chairman Pankaj Chadha said the duty, which can be imposed in emergency situations, was unjustified as it will push up prices by 20-25% as domestic prices are always linked to the landed price.
He said that due to freight and port handling charges, imports from Asean countries are suffering a 12.5% price disadvantage, which goes up to 20% in case of Chinese steel as they also face import duty. He said that bulk of the imports are from Japan, which is seen as a high cost producers.
“Our players (steel companies) say that they are the cheapest. Their balance sheets are also strong. The proposal has been made without consulting the user industry, which will be hard,” Chadha said, adding that if action has to be taken it must be on specific products. He said that govt programmes will be among the worst hit as it is the largest buyer of steel for its ambitious infrastructure programme.